Cabinet Approves Rs 2.55 Lakh Crore Emergency Credit Scheme To Support War-Hit Businesses

The scheme aims to facilitate an additional credit flow of Rs 2.55 lakh crore, including Rs 5,000 crore earmarked for the airline sector. NCGTC To Provide Credit Guarantee Cover Under the scheme, National Credit Guarantee Trustee Company Limited (NCGTC) will provide credit guarantee coverage to Member Lending Institutions for loans extended to eligible borrowers facing short-term liquidity pressures. The guarantee coverage has been set at 100 percent for MSMEs and 90 percent for non-MSMEs and the airline sector. No guarantee fee will be charged under the scheme. MSMEs Can Avail Up To 20 Additional Credit Eligible borrowers include MSMEs, non-MSMEs with existing working capital limits, and scheduled passenger airlines with outstanding credit facilities as of March 31, 2026, provided their accounts are classified as standard. For MSMEs and non-MSMEs, additional credit support of up to 20 percent of peak working capital utilised during the fourth quarter of FY26 will be available, subject to a cap of Rs 100 crore. For airlines, additional credit of up to 100 percent of eligible limits will be available, capped at Rs 1,500 crore per borrower, subject to specific conditions. Loan Tenure Extends Till March 2027 Loans for MSMEs and non-MSMEs will have a tenure of five years, including a one-year moratorium, while loans for airlines will have a seven-year tenure with a two-year moratorium period. The scheme will apply to loans sanctioned from the date of issuance of guidelines by National Credit Guarantee Trustee Company Limited (NCGTC) until March 31, 2027. The government said the initiative is aimed at helping businesses manage liquidity challenges, sustain operations, protect jobs, and maintain supply chain stability amid the ongoing geopolitical disruptions. (KNN Bureau)